Danville Man Sentenced in Ponzi Scheme

By Bay City News Service --

A Danville man who lived in Blackhawk was sentenced in federal court Friday to 15 years in prison for defrauding 500 investors of $62 million.

Prosecutors said in court papers that Peter Son, 38, and a business partner "created the classic Ponzi scheme, paying off early investors when needed while continuing to generate income through false advertising."

The two men's companies, SNC Asset Management Inc. and SNC Investments Inc., with headquarters in Pleasanton, took in $85 million from 500 investors between 2003 and 2008. About $23 million was paid back to investors who either closed their accounts or declined to reinvest the supposed returns, leaving a total loss of $62 million for investors, prosecutors said.

Many of the victims were Korean-Americans or Koreans living in California or South Korea, prosecutors said. Assistant U.S. Attorney Stephen Corrigan wrote in a sentencing memorandum that the fraud had a devastating effect on the victims.

"Victims report they have lost their life savings, college savings for their children and retirement savings. Victims have had to file for bankruptcy and others have had to return to work," Corrigan wrote.

U.S. District Judge Lowell Jensen also ordered Son to pay restitution in an amount to be determined. Son pleaded guilty in April to one count of conspiracy to commit wire fraud and one count of conspiracy to engage in monetary transactions with the proceeds of wire fraud.

Son and his partner, Jin Chung, 46, formerly of Los Altos, promised investors returns of 24 to 36 percent per year in foreign currency trading. Last year, prosecutors said Chung went to South Korea. U.S. Attorney Joseph Russoniello said court records show that the pair engaged in very little foreign exchange trading.

Russoniello said Son used some of the funds to pay a $9,000 monthly mortgage for his Blackhawk residence, Blackhawk Country Club dues, and a $3,000 monthly salary for his wife, who allegedly did no work for the investment companies.